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Is PacWest bancorp facing financial struggles?

Is PacWest bancorp facing financial struggles?

Pacwest Bancorp, a regional lender based in Beverly Hills, California, has recently made headlines after confirming that it is considering all strategic options, including a sale, to stay afloat. This news follows a sharp decline of PacWest's shares, which fell around 45% early Thursday and trading was briefly halted. The bank has been struggling since the collapse of Silicon Valley Bank in March, resulting in around a fifth of PacWest's customers withdrawing deposits. This has cast a shadow of doubt among investors and US adults alike, with 48% of US adults expressing worry about their money following the recent turmoil, according to a Gallup poll.

Hours after the Fed's comments, PacWest Bancorp is now looking into strategic options, including a sale, as another West Coast regional bank is under pressure. The stock just crashed 55% in after-hours trading at roughly three dollars and is now down over 87% in 2023.

When banks consider a strategic asset sale, it often correlates to the offloading of bad debt from one bank to another, repackaged into CDOs. The situation at PacWest Bancorp is indicative of the ongoing banking crisis and is yet another example of how regional lenders are struggling to stay afloat in the post-pandemic economy.

It remains to be seen what the bank's ultimate fate will be, but it is clear that investors and consumers alike are concerned about the stability of the banking sector.

If you are struggling with debt and need to reduce or eliminate debt entirely, you may be considering filing for bankruptcy. For a free consultation, call us at 626-338-5505, where a member of our knowledgeable staff will be more than happy to assist you with any questions or needs you may have.

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